International accreditation, linguistic proximity and trade in medical services.

The recent growth in the globalization of medical services has attracted broad attention from scholars and policymakers. The intimacy and risk associated with many medical services makes these markets especially sensitive to trade barriers, transaction costs and asymmetric information. This paper uses a gravity model to investigate the factors associated with the global pattern of bilateral trade in medical services. Using data from the United Nations International Trade in Services Database, we differentiate between trade flows in which the recipient travels to the service provider, 'medical tourism,' and those trade flows in which the service is delivered to the recipient, 'other health services.' Our findings indicate that, after controlling for various economic, historical and geographic linkages, linguistic proximity and international accreditation are not significant predictors of the bilateral pattern of medical tourism, though they are associated with greater trade in other health services. We argue the key difference is that trade in other health services, including medical transcription, diagnostic analysis and laboratory services, is akin to trade in intermediate inputs. The medical service providers contracting for these services are especially sensitive to risk and have strong incentives to monitor quality. By contrast, medical tourism is a market in which patients do not have strong incentives to engage in costly monitoring or information gathering. Providers seeking to market their services to patients abroad have mitigated the effects of linguistic dissimilarity and asymmetric information by exploiting the strong complementarities between medical and non-medical tourism services.

Willingness to pay for safe drinking water: A contingent valuation study in Jacksonville, FL.

A surprising number of U.S. cities have drinking water with unhealthy levels of chemicals and contaminants. The city of Jacksonville (Florida), the location for this study, owns the dubious distinction of being ranked among the worst major American cities in water quality according to water quality tests conducted between 2005 and 2009 by the Environmental Working Group (EWG). This report of toxic chemicals in the Jacksonville water supply generated considerable negative publicity and coincides with a frequent and common complaint among residents of foul-smelling water. System revenues from water supply and program subsidies from government are often inadequate in mitigating the problems, perceived or real, with water quality. Therefore, this paper investigates how much residents will be willing to pay for improvements in the quality of tap water. The commonly known economic metric willingness-to-pay (WTP) is applied to estimate any possible rate hikes public utility can assess in any effort to improve real or perceived water quality. The study shows that the estimated weighted average of WTP is $6.22, which can be added to the regular water bill without eliciting much negative reaction from residents. Evidence shows that factors such as trust in authorities, health concerns, family structure, and education significantly impact the WTP.